The global mining sector is increasingly embracing ESG practices within its operations, but Mexico’s mining industry requires more transparency and improved communication, according to experts.
An increasing number of investors are implementing ESG scores and comparative studies to assess performance and corporate governance when making their financing decisions, says Fernando Alanís, Director General, Baluarte Minero.
Baluarte Minero is a division of Industrial Peñoles, the largest global producer of refined silver. Its primary role is to consolidate and streamline administrative and technical shared services for both Peñoles and subsidiary Fresnillo plc. These measures aim to enhance efficiency and maximize potential synergies between the two entities.
Previously, investment funds were primarily interested in financial outcomes and paid less attention to operational matters, Alanís tells El Economista. In contrast, today's financial institutions are making an effort to comprehend not only financial performance but also operational processes, community relationships, and environmental and best practices. This broader perspective contributes to increased confidence in their investments.
Alanís emphasizes that there is a need for greater transparency within the sector to build trust among the public. He adds that the mining sector has a poor reputation due to operational accidents that took place in the past, but the accident rate has significantly shrunk. "Every day, 500,000 people enter mines in Mexico. When you look at the accident rate, it is extremely low. But we do not know how to communicate this to the public," says Alanís.
In December 2022, Minister of Economy Raquel Buenrostro said that the mining industry is one of the sectors with the lowest tax contributions in the country. “Major contributors pay 2.4% of their total income; in contrast, employees pay between 30 and 35%, while mining companies only pay 0.002% of their total income,” she said. Alanís dismissed these statements.
According to the Tax Administration Service (SAT), between 2015 and 2021, the mining industry avoided paying over MX$75 billion (US$4.2 billion) in tax obligations. However, in the current administration, tax collections from major contributors in the mining sector amounted to MX$65.9 billion, a 561% increase compared to what was collected during the previous administration.
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